Correlation Between Mycron Steel and UNIQUE

Can any of the company-specific risk be diversified away by investing in both Mycron Steel and UNIQUE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mycron Steel and UNIQUE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mycron Steel Bhd and UNIQUE, you can compare the effects of market volatilities on Mycron Steel and UNIQUE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mycron Steel with a short position of UNIQUE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and UNIQUE.

Diversification Opportunities for Mycron Steel and UNIQUE

-0.21

Correlation Coefficient

Mycron Steel  UNIQUE

Very good diversification

The 3 months correlation between Mycron and UNIQUE is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and UNIQUE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQUE and Mycron Steel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mycron Steel Bhd are associated (or correlated) with UNIQUE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQUE has no effect on the direction of Mycron Steel i.e., Mycron Steel and UNIQUE go up and down completely randomly.

Pair Corralation between Mycron Steel and UNIQUE

Assuming the 90 days trading horizon Mycron Steel Bhd is expected to under-perform the UNIQUE. In addition to that, Mycron Steel is 1.12 times more volatile than UNIQUE. It trades about -0.03 of its total potential returns per unit of risk. UNIQUE is currently generating about 0.08 per unit of volatility. If you would invest  36.00  in UNIQUE on October 22, 2024 and sell it today you would earn a total of  4.00  from holding UNIQUE or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Mycron Steel Bhd  vs.  UNIQUE

Mycron Steel Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mycron Steel Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Mycron Steel is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

UNIQUE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQUE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, UNIQUE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mycron Steel and UNIQUE

The main advantage of trading using opposite Mycron Steel and UNIQUE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, UNIQUE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in UNIQUE will offset losses from the drop in UNIQUE's long position.

The idea behind Mycron Steel Bhd and UNIQUE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.